UK – Pension funds pulled £1.1bn (€1.6bn) from equity specialist Liontrust Asset Management in the year to the end of March – hit by a move towards hedge funds.
It said in its 2004 earnings statement: “The loss of over £1bn of institutional pension fund mandates is disappointing but reflects the underperformance against their benchmarks of our growth and large-cap investment processes in the last couple of years.” It did not name the schemes.
It added that the continued popularity of hedge funds has “hurt” the business. “We believe a significant proportion of the assets that have been withdrawn have moved to 'absolute return' investment strategies.” It said it was confident about its investment processes.
Chief executive Nigel Legge told IPE the revenue losses from the withdrawals was offset by profit from new unit trust sales.
Assets under management fell by 13% during a year in which the FTSE All-Share index rose 12%. Assets under management as at the end of May were £4.37bn.
Pre-tax profit rose 20% to £10.95m. “We have increased our profits, core earnings per share and dividend for the fifth consecutive year,” said Legge.
“We have controlled our costs and our cost: income ratio has fallen again; we have increased our cash. The business is in good shape.”
He added: “Whilst our investment performance has been more mixed than in previous years, long term performance in all funds remains good.”